There is nothing wrong on the part of any government in giving incentives to industries and companies that want to set up their units in its state.
In fact, the incentives are desirable, as they contribute to the state’s economy and also generate employment.
There is a limit for such incentives. The government can provide land at a concessional rate, offer tax incentives, supply electricity at the subsidised rates and create infrastructure facilities like roads.
But giving precious land to the companies almost free of cost is something unusual, especially when land has become very costly in the current situation.
Especially for software companies, allotment of land free of cost is surprising, as the employment they generate is insignificant compared to the value of land.
Moreover, these days even software giants like Microsoft, IMB, Google and Apple, which have got prime land at negligible cost promising huge employment potential, are sacking employees left, right and centre after the advent of artificial intelligence.
Yet, the Andhra Pradesh government headed by N Chandrababu Naidu is still offering land almost free of cost to the software companies.
Recently, there was a huge uproar over the allotment of prime land in Visakhapatnam to software companies like Tata Consultancy Services and Cognizant for a paltry amount of 99 paise per acre.
Now, the Naidu government took a step ahead and is offering land to all the IT companies for the same price. A decision to this effect was taken at the state cabinet chaired by Naidu at the secretariat on Wednesday.
The cabinet approved the Land Incentive for Tech Hub (LIFT) Policy 4.0 for IT and ITES companies. As part of this policy, the state government will allocate land at 99 paise per acre throughout the State on lease to prospective investors.
As per the scheme, IT and ITeS companies must have a Fortune/Forbes ranking listing in the past three years or a market capitalisation of at least $1 billion or annual revenue. They must create at least 3,000 jobs in three years.
The prospective Global Capability Centres (GCCs) investors must create at least 2,000 jobs in 3 years and 500 jobs per acre.
The interested IT Park developers must have already developed at least 10,00,000 sq.ft. commercial office space, construct at least 1,00,000 sq.ft. per acre, and have a total of 10,00,000 sq ft of built space.
For GCC developers, there should be an anchor tenant agreement for 20 per cent of the built-up space, and at least 50 per cent of the IT office space must be sold to eligible companies.
“Considering the increasing congestion and costs in Tier-1 cities like Bangalore, Hyderabad, and Gurgaon, this cost-based attraction strategy has been formulated to be useful to people by choosing land as a development driver, eliminating relocation costs and associated risks, and attracting prominent companies,” the government said.